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46 Unexpected Impacts consumption and therefore will vary with the number and weight of barges. The lockage fee would vary with the num- In the case of costs to trucking firms from highway tolls, ber of barges and number of locks used. Thus, a towboat op- one can safely say that decisionmakers (typically states) were erating in free water on the Mississippi downstream from aware that new tolls would increase truckers' costs. Whether Locks and Dam 27 would pay no user fee at all, and traffic on decisionmakers saw the costs in larger terms as an impact on the Upper Mississippi, the Ohio, and other tributaries would the freight system is doubtful. That state legislators or trans- pay fees. The largest relative shift of burden would be from portation officials anticipated significant diversion from tows that never use locks at all to tows that do use locks. tolled roads seems less likely; and the same would be true for Although the relative change in tax burden within the indus- external costs of truck diversion to lower level roads. Officials try would have some effect, the greater effect would be the in- are reaching for tolls as a response to severe financial pressure crease in the overall tax burden on inland towing. This would on their states, and awareness of increased cost to truckers necessarily raise barge rates and affect barge share relative to and to motorists might not be sufficient to dissuade them. rail. The effect would, of course, be greatest for moves with a high number of locks relative to length of haul. But because Lockage Fees for Inland Waterways the lockage fee drops for smaller locks and smaller tows, this might have the curious effect of favoring the less cost-effective Policy Description traffic--small tows on low-volume rivers. A more detailed Historically, the inland towing industry paid no user assessment of the impacts of this proposed policy is included charges or taxes. The Federal government financed the inland in Appendix B. navigation system out of general funds under the principle It is possible that the cost to the industry from a mode that flood-control and navigation projects provided a broad shift might be offset if the higher revenues from the fee public benefit, such that the financing burden should not be caused Congress to increase the level of investment in the placed on the users of the navigation system. This was in con- inland waterway system. This, in turn, could increase tow- trast to the highway and aviation systems, where revenues ing efficiency, allowing the barge industry to regain some from user taxes and fees have long been expected to cover a modal share. very high proportion of Federal expenditures. The principle of paying for the inland system as a general, Unexpected Impacts public benefit was partially abandoned with the Inland Water- way Revenue Act of 1978 and the Water Resources Develop- In this case, the research team has to speculate about the ment Act of 1986. As a result of these Acts, vessel operators impacts of a proposal that has not been implemented and on most of the inland waterway system pay a $0.20 per gallon may well not be implemented. One clear intent of the policy fuel tax, the revenues from which accrue to the Inland Water- proposal is a substantial increase in user-fee payments from ways Trust Fund. the inland barge industry. Presumably, the purpose of the The Bush Administration proposed phasing out the fuel lockage fee is to tie the pricing of the system closer to the de- tax and replacing it with a lockage fee. With the lockage fee, a gree of use of the facilities that account for most of its cost. tow would pay a fee per barge per lock. For each lock with a The proposed policy does that to some degree, but it is far main-chamber length of 600 feet or more, the fee would start from the marginal-cost pricing for which many economists at $50 per barge in 2009 and increase in $10 increments to would argue. The flat fee per lock per barge takes little ac- 2012. For locks with a main chamber less than 600 feet, the count of cost differences among river segments and, as noted, fee would be 60 percent of that for the larger locks. (For con- the lower fee for smaller locks might reduce cost recovery on text, all of the locks on the Mississippi and Ohio Rivers have low-volume segments. main chambers of at least 600 feet.) Peak Pricing for Port Trucks Policy Impacts Policy Description According to industry testimony, the fee level reached in The Ports of Long Beach and Los Angeles are the largest 2012 would roughly double the total payments from inland container ports in the United States. Local roads are often towing.57 Lockage fees would also entail some shifting of the congested with trucks traveling to and from the ports. To ad- burden among users. The fuel-tax payment depends on fuel dress this issue, the California Legislature proposed a law to tax containers moving through the port between 8 AM and 57Stephen Little, Waterways Council, Inc., statement before the Committee on 5 PM. The purpose of this proposed tax was to shift traffic Transportation and Infrastructure, U.S. House of Representatives, April 30, 2008. into off-peak hours.